Business / Corporate

DLE, Toho to use theater screens as testing ground for new characters

Bloomberg

In the age of distraction, Ryuta Shiiki figured out a way to get the undivided attention of 37 million people for three minutes.

Whenever the lights dim in a movie theater run by Toho Co., the nation’s largest chain, animated characters from Shiiki’s DLE Inc. appear, urging the audience to silence their phones and refrain from talking.

DLE and the movie theater unit of Toho, the creator of “Godzilla,” announced plans Wednesday to use the slot between trailers and the feature as a content incubator starting next month, pitting new characters in a popularity contest and sharing the intellectual property rights.

At stake are the ¥179 billion animation market and ¥1 trillion video game market.

“The 10 minutes before the start of the movie are extremely valuable,” Shiiki, the founder and chief executive officer of DLE, said in an interview Tuesday in Tokyo. “You have 30 to 40 million people a year turn off their mobile phones and patiently face the screen with nothing else to do.”

Starting Nov. 1, Toho patrons will see DLE’s “Character Battle Club” segment presenting three new character skits, Shiiki said.

The lineup will change every three months, with online voting, social media popularity and a panel of judges deciding which characters survive into the next round, he said.

Until now, DLE’s business model was to use animated series on TV to promote goods and sell DVDs.

“This is a completely different process for making characters popular,” Shiiki said.

His use of the new approach came after the “Eagle Talon” anime was broadcast for a three-month run on late-night TV in 2006.

The cast of hapless villains, including a cape-wearing boss named after a former prime minister and a genius scientist teddy bear, has won a cult following and led to a partnership with Toho the following year, Shiiki said.

“It’s a new way to enjoy the movie theater and a chance to develop future characters in collaboration with our customers,” Toho spokesman Shinichiro Kondo said.

The popularity of the “Eagle Talon” villain cast has helped boost DLE’s shares 89 percent this year, ranking it among the country’s 10 best-performing initial public offerings in 2014.

The three-minute public service announcements run at Toho’s theaters for free. The animation company makes money selling games for Apple Inc.’s iPhone and devices using Google Inc.’s Android operating system.

The company’s animated icons rank eighth on Naver Corp.’s Line messaging service, which has 560 million users. DLE characters have also been used to market products ranging from Toyota Motor Corp.’s hybrids to Nomura Holdings Inc.’s investment offerings.

DLE forecasts as much as ¥557 million in profit on ¥2.6 billion in sales in the fiscal year to June 2015, according to a company presentation.

“Working with Toho gave us a 100 out of a 100 success rate in making new characters popular,” Shiiki said.

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